Vaughan Baker is helping cause headaches for his friends in Singapore.
Baker, who previously headed up MyRepublic New Zealand, is now the Singapore-based group’s director for government and corporate relations. MyRepublic bills itself as the first purpose-built ultra-fast broadband provider in the Asia-Pacific region and offers 1Gbps services as its entry level product in Singapore.
“I’ve got quite a few expat mates working in finance, oil and gas and IT, and they dread the day the young smart Singaporeans who work for them say, ‘Boss, I’m resigning’. And it’s not to go somewhere else. They’re off to give the start-up they’ve been working on in their bedroom a go.
“That entrepreneurial way of thinking is promoted by the fact people have got this always-on connectivity – that’s the base layer. It’s one of the pillars,” says Baker.
“My mates have no choice but to shake their hand, wish them luck and maybe ask if they need any seed capital.”
Singapore is reaping the rewards of its focus on infrastructure (along with the wider start-up friendly environment). The island-state’s start-up companies closed US$1.2 billion in venture capital deals in 2017, according to Enterprise Singapore.
Baker believes New Zealand could reap similar benefits because of the keen uptake of fast broadband here. It represents a “tremendous opportunity” for New Zealand, he says.
His wider view of the Asia-Pacific region has driven home to him the fact New Zealand has a head-start over the other countries that the Singapore ISP operates in – with the exception of Singapore itself.
Singapore kicked off its government-led, nationwide broadband network back in 2006 and has had 1Gbps services, priced at less than S$50 a month, since mid-2015.
“What I like about the ability to be able to offer gigabit fibre infrastructure is the fact it transforms broadband into a true utility service,” says Baker.
“It makes it ubiquitous. It is always on, and however many devices you have connected in the home or business at any one time they will all just perform. For me that makes it akin to electricity – you just flick a light switch and it all happens.
“Singapore has had this for some time and now New Zealand is starting to adopt it.”
1Gbps connections account for about eight percent of Chorus’ fibre base, and between 15 to 30 percent of MyRepublic’s New Zealand sales. Baker is eyeing the day when the ISP only offers 1Gbps here. “Once we do that it becomes this transformative service like we’ve seen in Singapore.”
While New Zealand’s gigabit offerings are around double the price of those in Singapore, Baker thinks this is a fair price given our country’s geographic spread and rugged terrain. Although he is keen to see prices drop below $100. He dubs this “mass market pricing”.
While New Zealand and Singapore are embracing 1Gbps – and eyeing 10Gbps, with trials gearing up in both countries – it’s a harder proposition for the Australian market. The various access technologies – VDSL, HFC (Hybrid Fibre-Coaxial) cable, fibre-to-the-curb, fibre-to-the-premises, fixed wireless and satellite – create challenges when it comes to delivering the higher speed services.
“In New Zealand we’re not hamstrung that way. [However] in Australia, while some people are getting fibre like in New Zealand, and are able to access those higher speeds, those with ADSL or VDSL are getting maximum achievable speeds of, say, 50 to 60Mbps.”
Baker is adamant New Zealand should be proud of its Ultra-Fast Broadband roll-out and the keen uptake of the service, noting that unlike Singapore and Australia, there is no mandate to move to fibre.
“In Singapore, it’s the only infrastructure, so it is almost mandated that everyone move across to the NetLink infrastructure. And, in Australia, they have a forced migration after 18 months of the NBN [National Broadband Network] being available, with some exceptions. In New Zealand, it has been for retailers to present a compelling case for people to move to fibre, and they’ve done a fantastic job.”
He says the New Zealand telco market is fiercely competitive, noting it only took one to two months for incumbents to adjust their pricing and models to compete when MyRepublic launched here, in 2014. Australian competitors took a while to respond.
While New Zealand, Australia and Singapore have adopted government-led broadband roll-outs, MyRepublic’s fourth market, Indonesia – a country it entered at the request of an investor who wanted the ISP to take over its existing business – has taken a different tack. With no fixed infrastructure in place, companies such as MyRepublic are deploying their own fibre infrastructure. Surprisingly, it’s not as Wild West as you might think, with the companies avoiding overlaying each other and even wholesaling access to each other to extend their respective footprints.
“Commercial pragmatism is prevailing,” Baker notes.
Despite this, he acknowledges the limitations of the model, noting companies cherry-pick the most economically viable cities and avoid regions that make for less economic success.
“Government involvement pushes the case to work beyond the big cities, taking a longer view of return on investment – or even viewing the return as possibly being a social return,” he says. “It is also very hard to make the case for such a major capital investment without some sort of assistance. Government involvement helps with both aspects of such investments.”
Baker relishes MyRepublic’s role as a challenger in each market. The company’s goal is to take five percent market share or greater in each country it enters. It is tracking to achieve at least that in all its markets, he says.
“In Singapore, we currently have over seven percent of the market. In New Zealand, we are typically taking around five percent of the market, and in Australia it is the same, although they are sitting at only around 30 to 40 percent uptake [of the NBN] and it’s only that high because of the forced migration.
“In Australia, when we go up against the incumbents, they are trying to make a customer shifting to the NBN see it as no change – just an upgrade of the underlying infrastructure. Whereas challengers are trying to get the customer to see the upgrade as an opportunity to look at new options.”
Last year, MyRepublic launched a mobile service in Singapore, piggy-backing on StarHub’s network (one of the country’s three major telcos). The company, which recently lost its bid to become Singapore’s fourth mobile operator to TPG, plans to offer a similar MVNO (Mobile Virtual Network Operator) deal in Australia this year. Baker hopes a Kiwi offering will be available in the first half of 2020. (MVNOs lease network capacity and concentrate on offering services instead.)
“A technical person would say all we’re doing is selling a fixed service and a mobile service, but you can tip that on its head and say: We’re going to connect you and your family – how many devices do you want?
“Our mobile service in Singapore operates on the same system as our fixed service, so some people who are brighter than me are able to take it and then package it up in different ways.”
For MyRepublic, MVNO deals are a logical move. The company is firmly of the belief that capital should be used to acquire customers, rather than build networks. Noticeably, New Zealand, Australia and Singapore are all markets where broadband infrastructure is provided on an open access basis, with equal footing being accorded both incumbents and challengers.
And, as for those incumbents, Baker believes they too will increasingly embrace a service model. “They already recognise that they don’t need to own the infrastructure right the way through in order to differentiate their service.”